NPO Finances Stretched Thinner Now Than In 2017

NPO Finances Stretched Thinner Now Than In 2017

Andy Segedin |

May 10, 2018

The age-old story continues for 2018. There’s more work for nonprofits to do and fewer resources with which to do it. More than four out of five (86 percent) of nonprofit leaders report the need for services is rising. Nearly two-thirds of those leaders (63 percent) are planning to up services, but the majority (57 percent) do not anticipate meeting need.

The data illustrates a sector that is stretched thinner than 2017. Last year, 79 percent of organizations saw an increased demand for services and 55 percent were not able to meet that need.

The figures come from Nonprofit Finance Fund’s (NFF) State of the Nonprofit Sector Survey 2018, which features responses from about 3,400 sector leaders across all 50 states. The survey results, according to authors, are intended to provide nonprofit leaders with comparisons as to how peer organizations are faring, support open discussions among organizations, and inform testimonies and grant proposals.

Two-third of respondents (67 percent) reported that federal government action has made the lives of their clients more difficult, with 63 percent of organizations serving low-income individuals. Leaders disclosed keeping organizations afloat has been difficult while helping clients back onto their feet. Greater than three out of five (62 percent) of participants stated that financial sustainability is one of the top challenges faced.

Despite this struggle, half (50 percent) of leaders reported that their organization ended 2017 with a surplus while 26 percent broke even and 24 percent ended up in the red.

“These data reaffirm the unflagging dedication of nonprofit leaders, who continue to pursue new ways to more effectively support more people and communities,” said Antony Bugg-Levine, CEO of NFF. “That said, we are also hearing intense worry among nonprofit leaders on behalf of the people they serve.”

Collaboration and diversity is another sizable trend moving through the sector, per the survey data. Nearly seven out of 10 (68 percent) of leaders reported their organizations are collaborating with peer groups. And, 60 percent have made plans to increase organizational diversity.

Beyond internal efforts, 64 percent of respondents stated that their organizations address racial inequality as part of mission and 50 percent indicated that those efforts have increased in the past year.

Additional survey findings included:

Some nonprofits wound up in a better position than expected. Among nonprofits with at least six months of cash on hand, 33 percent anticipated a 2017 surplus, but 64 percent ended up with one;

Competing with other workplaces for staff talent is becoming an obstacle. Two third (66 percent) of respondents identified providing competitive pay as a primary challenge. The majority (54 percent) increased staff pay in 2017; and,

Organizations are looking toward the future of their leadership. Succession plans are being developed at 45 percent of organizations.